CLEVELAND, OH. — June 1, 2015:AlgiSys today announced it has been awarded a composition of matter patent from the USPTO, giving the company broad control over the sustainable production of EPA omega-3 fatty acids from a naturally EPA-rich algal species.

“In order to produce commercially viable EPA omega-3 oils from microalgae, it is necessary to have an organism that simultaneously produces sufficient quantities of both oil and EPA” said Dr. Charles Roe, Chief Technology Officer of AlgiSys.

AlgiSys has been working on the development of an algal species, creating culture conditions that meet these requirements and allows for the economical production of an all-natural, vegan source of high-quality omega-3 oils. AlgiSys expects to begin producing product within the next 12 months.

“This patent is extremely valuable, as the Omega-3 market is a multi-billion dollar business that continues to grow globally. EPA omega-3 is one of the critical components found in today’s fish oil products. There was no sustainable, natural source for oils rich in this omega-3 fatty acid alone—until now,”said AlgiSys CEO, Michael LoPresti.

The global market for omega-3 is an astonishing $32 billion and is projected to grow to $36 billion, by 2016. Algisys’ initial research phase has been successfully completed and the company is currently forming fruitful relationships with industry partners to take this high-value product to market.

“At MBI, we work to help innovative companies take their groundbreaking technologies from the research lab to the marketplace. It has been a real pleasure working with AlgiSys, helping them take this game-changing, sustainable technology to point of production. The proprietary AlgiSys EPA-oil has tremendous potential benefits as a sustainable, vegetable-based source of this critical nutritional compound, both for human and animal health applications,” said James Wynn, Director of Biobased Technology Derisking at MBI.

Omega-3 fatty acids are essential to human health and nutrition and play critical roles in normal body functions, from controlling blood clotting, to reducing inflammation, to building cell membranes in the brain. EicosaPentaenoic Acid, or EPA, is a long-chain omega-3 fatty acid clinically proven to fight the effects of ageing as well as promote cardiovascular and joint health. Since the human body does not naturally produce omega-3 fatty acids, it is important that our diets are rich in these nutrients.

AlgiSys LLC is a biotech company producing Omega-3 Fatty Acids, primarily EPA, from micro-algae for heart and joint health.AlgiSys uses proven fermentation and downstream processing technology to efficiently scale and accelerate the production of EPA oils at commercial levels. Learn more about AlgiSys at www.algisys.com

AlgiSys did its proof of concept work in concert with Michigan Biotechnology Institute (MBI)

The increased concern about the sustainability of omega-3s supply has given a powerful push to the development of alternative sources, now giving rise to yet another algae supplier. This one has a twist, though; officials with AlgiSys, a development stage biotech company, say they are using technology that has already been demonstrated at commercial scale.

Michael LoPresti, CEO of the Cleveland-based company, said AlgiSys has already raised $6 million in startup capital. Part of the way the that the AlgiSys team, which includes chief technical officer Charles Roe, sold the idea to investors was to emphasize that the company is not breaking new ground per se, but is apply a proven technology in a new way.

“There are three primary ways to grow algae: in open ponds, in bioreactors and via fermentation,” LoPresti told NutraIngredients-USA. “It’s the division between phototrophic (using sunlight) and heterotrophic organisms. To date the real proven model has Martek’s (now part of DSM) using fermentation,” LoPresti said.

So the AlgiSys founders decided, given Martek’s huge success, to not try to reinvent the wheel but to using a similar technology in such way that it did not tread upon the existing patents. AlgiSys has been doing behind-the-scenes development work on a proprietary algae species that yields an EPA-rich oil in a fermentation setting. The Martek technology was centred on DHA.

“Our process follows a very similar model. We believe we will become one of the primary companies on the EPA side using fermentation,” LoPresti said.

Going to commercial scale

There have been almost as many methods proposed for the growing of algae for supplement ingredients has there have been strains that have been researched. Many approaches offer promise at bench scale but then founder when proponents try to ramp them up. Of particular concern has been controlling contamination in larger scale algal cultivation schemes.

This was a concern that led LoPresti and his fellow founders down the path blazed by Martek. Following the Martek lead has significantly reduced the company’s risk, he said.

“We don’t believe that a phototrophic approach has yet been proven to be completely scalable on the commercial level. We know that there is a significant amount of capital need to start up and sustain that model. And there are a lot of exposure points in that process where things can go wrong. So it’s a real win-win for our company in that we are following a path of proven scalability,” he said.

LoPresti said the company has met all of its development milestones to date. Initial work on the algal species was done at Virginia Tech University. The company’s technology platform was developed in concert with the Michigan Biotechnology Institute (BMI) in Lansing. BMI, which has a strategic partnership with Michigan State University, is a development non-profit organization that works to “derisk” new technologies. AlgiSys performed its proof of concept and scale up work there as well as with some unnamed European research partners. The concept is now ready for prime time, LoPresti said.

“We have me all of our milestones to date and we have one last milestone to meet and that is toget to full commercialization. We have a North American and a European partner we are working with on that. At that point we will be able to produce commercial levels of omega-3s in 150,000 liter vessels,” he said.

Market potential

Up to now most omega-3 supplements on the market have offered some ratio of EPA and DHA in the same product. Part of this was driven by what was easily refined from fish oil, as the 18:12 EPA to DHA ratio became the industry benchmark. Now that there are different ratios and concentrations available, and EPA only or DHA only products are possible (Martek having blazed a path in this, too) Roe said there is significant market potential for an EPA-only product.

“Heart health and joint health are two indications for a standalone EPA product and joint health is particularly significant as we are moving on to an aging population. There is mood, too, but I don’t think we can say anything conclusively about that yet,” Roe said.

Sustainability message

LoPresti said the market for omega-3s will continue to grow, citing data that indicates it will hit $36 billion by 2016. All of that demand will place increasing pressure on supply, a question which is especially acute at the moment with the issues surrounding the Peruvian anchovy fishery, which was suspended altogether for the most recent catch season. Even if that fishery recovers, the supply question isn’t going away.

“Currently there are 32 pharmaceutical drugs based on omega-3s in the pipeline. The demand that is going to be placed on the supply by these high concentrations is going to be significant. With sustainability always going to be an issue on the horizon, that bodes well for a company like us where we can produce as much of the ingredient as is needed,” LoPresti said.

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CLEVELAND, OHIO, February 8, 2015: Algisys is a Bio-tech company producing Omega-3 Fatty acids, primarily EPA from micro-algae for heart and joint health. The Omega-3 Market globally is a $32B Market projected to grow to $36B by 2016. AlgiSys has raised over $6MM for the commercial scale up of its Algal technology achieving all targeted milestones. “It is now time to publicly introduce AlgiSys to the market”.

EPA is a long-chain omega-3 fatty acid, or “good fat”, that has clinically proven cardiovascular system and joint health benefits. AlgiSys’ environmentally sustainable products can replace or enhance EPA omega-3 oils derived from the world’s primary, but diminishing sources of fish oil. Furthermore, current dietary sources of EPA are inadequate relative to daily recommended levels. AlgiSys’ vegetarian EPA oils can be quickly adopted by customers because they mirror existing conventional fish and non-fish-sourced oils.

AlgiSys has been performing its technology development and scale-up work through technical collaborations with several world-class partners including Michigan Biotechnology Institute (“MBI”) and several Internationally Renowned European based research facilities. Michael LoPresti, CEO and Co-Founder said, “By using the Company’s core expertise, these collaborators are helping to accelerate efforts necessary for commercialization of the Company’s technology”.

Dr. James Wynn at MBI, who is leading the commercial development work commented; “Using a “non-GMO” fermentation-based approach to produce EPA-rich oil has enormous potential human health benefits, AlgiSys is developing a truly ground-breaking product.” said Wynn “AlgiSys provides high levels of sterility and process control, which will produce a purer and more consistent algae product”. It is MBI’s mission to help nascent technologies such as this to make the successful transition from promising laboratory finding to a world-changing commercial technology.”

Proven Biotech Production Model

AlgiSys uses proven fermentation and downstream processing technology to efficiently scale and accelerate the production of EPA oil at commercial levels. COO, George Antoon stated, “AlgiSys is using a cost effective and proven process in manufacturing Omega-3 oils, this is in contrast to more expensive, unproven and less efficient open-pond and photo-bioreactor approaches.” AlgiSys’ business model also requires less initial capital to set up production. They plan to either, lease available equipment and space, or have companies manufacture for them on a contracted basis.

Mr. LoPresti, added, “AlgiSys has made significant progress developing our EPA Omega-3 oils with minimal investments. Our predecessor and Industry pioneer, Martek Biosciences, spent significant amounts of capital and time developing its DHA Omega-3 technology to get where we are now. Martek was the leader in the algae-based DHA Omega-3 industry that was eventually sold to DSM for over $1 Billion. We would be pleased to follow in their success.”

Michael Finn, AlgiSys Director commented "The multi-billion dollar Omega-3 market continues to grow at double digit levels worldwide. As the vast majority of Omega-3 production comes from fish, a supply problem looms. Worldwide demand for fish based products is significantly straining supply." Mr. Finn continued, "This scenario begs for a non-fish based supply of Omega-3 to meet future demand. AlgiSys provides an algal based source of Omega-3 that meets the worldwide need for a green, sustainable, vegan solution."

Key industry Dynamics and Growth Projections:

The global omega-3 market size (end products in packaged format) is estimated to be $32 billion and is projected to grow to $36 billion by 2016. Source: Packaged Facts

EPA/DHA omega-3 fatty acids were the third fastest growing supplement between 2007 and 2012 with an average annual growth rate of 12%. Source: Nutraceuticals World 2013

The increased demand for omega-3s has resulted in fish oil supply constraint and pricing increases. This suggests the growing demand for omega-3s will outpace the current fish oil supply sources. The excess demand creates a unique opportunity for alternative omega-3 sources, such as algae, to meet the growing demand. Source: NutraIngredients-USA 2013

AlgiSys is in discussions with contract manufactures and customers in the United States and Globally. They are interested in pursuing all opportunities with potential investors, licensing partners and other business partners looking to expand their role in this growing multi-billion dollar industry worldwide.

CLEVELAND, OHIO, September 15, 2014: AlgiSys has contracted with World Class R&D centers in both the US and UK to develop its strain and fermentation process. “Our R&D team now provides full array of industry leading researchers and equipment not previously available from our other partners,” according to Dr. Charles Roe, Chief Technology Officer at AlgiSys.

Our new partner is among longest running agricultural and biological research organizations in the world, providing cutting-edge science and innovation for more than 150 years. This facility supports around 550 scientists, staff, and Ph.D./postdoctoral students. This partner has extensive knowledge and expertise in developing new practices to increase bioprocess productivity and quality, and seeks to develop environmentally sustainable solutions for both food and energy production.They have amassed a world-leading team of scientists in the area of plant lipid engineering scientists, and their collective expertise puts them at the forefront of a global imperative to produce a viable terrestrial alternative to fish oils. One of the key applications for this work is to create a more sustainable source of omega-3 long-chain polyunsaturated fatty acids (LC-PUFAs), which have been strongly linked with improved cardiovascular health and cognitive development. As well as the nutrition and health benefits, the production of plant-based methods to produce omega-3 LC-PUFAs may help reduce the problems for aquaculture companies who have to turn to less sustainable sources of omega-3 LC-PUFAs in fishmeal, as sea stocks of oily fish deplete. Current plant sources do not provide the right type of EPA omega-3 LC-PUFAs in the right quantities that are bioavailable to humans.

These researchers have delivered some of the key advances in the last 15 years, including the characterization of the omega-3 LC-PUFA biosynthetic pathway and its heterologous reconstitution in certain transgenic plants. The Group Leader on the AlgiSys project remarked that "The current systems of using fish oil and meal in aquaculture means fish-farming is the very definition of unsustainability, and there is a real need to produce sustainable terrestrial sources of these healthy oils.” He further elaborated that “Although the AlgiSys strain is highly complex, we are confident that we have achieved the ability to bring this organism to pilot plant and commercial levels very soon.”

Since receiving initial funding, AlgiSys has made significant progress in the commercial scale up of its technology. CEO Michael LoPresti remarked, “Our funding partners have enabled us to accelerate our entry into the market and establish AlgiSys as a player in the vegetarian omega-3 market. To help ensure our success, we have developed state-of-the-art algal technology, assembled a world-class management team, identified contract manufacturing options, and established customer relationships in a market that is experiencing double digit annual growth.” AlgiSys was founded in 2009 by Mr. LoPresti and Dr. Roe to commercialize 12 years’ worth of algae research into the production of omega-3 fatty acids.

CLEVELAND, OHIO, August 15, 2013: GBQ Consulting Valuation and Financial Opinion Services has recently provided an independent and in- depth study of the progress and potential of the AlgiSys intellectual property (IP), including its patent portfolio and trade secrets. GBQ has conducted this IP valuation analysis in conformity with the uniform standards of The Appraisal Foundation, the American Society of Appraisers, and the Institute of Business Appraisers. “Based on our indicated enterprise value of AlgiSys and our estimated value of the assembled workforce (the only material non-IP-related asset or liability held by the Company), we opine that the fair market value of the Company’s IP is $28.5 million as of the Valuation Date”. This report will be made available to new investors.

Michael LoPresti, CEO of AlgiSys, remarked that “We feel the GBQ report validates the enormous potential of AlgiSys to enter the omega-3 markets with significant know-how and the patent protection necessary to make us a leader in this industry. We expect our intellectual property to continue to appreciate in value as we enter the final stages of our technology commercialization efforts.”

CLEVELAND, OHIO, August 15, 2013: AlgiSys has closed its Series A offering and raised an initial total investment of over $6 million in an equity transaction in order to continue the development of its technology. “Our organism and fermentation process is highly complex, yet provides significant amounts of lipids containing Omega-3 EPA oils,” according to Chief Technology Officer, Dr. Charles Roe. Due to the need for additional funding, AlgiSys will immediately begin its next capital raise that will enable it to focus on the completion of its intensive efforts with R&D, scale up and technology commercialization in order to take advantage of the tremendous opportunities in the omega-3 markets. Michael LoPresti, the CEO of AlgiSys, commented that “We are looking for an investment group with the level of sophistication and commitment needed to bring us to a final commercialization level and take advantage of opportunities as they arise.”

Since receiving initial funding, AlgiSys has made significant progress in the commercial scale up of its technology. Mr. LoPresti remarked, “Our funding partners have enabled us to accelerate our entry into the market and establish AlgiSys as a player in the vegetarian omega-3 space. To help ensure our success, we have developed state-of-the-art algal technology, assembled a world-class management team, identified contract manufacturing options, and established customer relationships in a market that is experiencing double digit annual growth.” AlgiSys was founded in 2009 by Mr. LoPresti and Dr. Roe to commercialize 12 years’ worth of algae research into the production of EPA omega-3 fatty acids.

Michael Finn (VP of Business Development), who assisted in leading negotiations on the recent infusion of capital, commented, “We continue to be very excited about the market opportunities and look forward to meeting the challenges ahead as we enter this multi-billion dollar marketplace.” Mr. Finn has over 30 years of experience in raising venture capital and coaching early stage companies. AlgiSys has received additional coaching and support from Barry Rosenbaum and Gordon Schorr of the Akron ARCHAngels, Dr. Glen Gaughan and Meg Groh of BioEnterprise, and Anthony Margida of the Akron Global Business Accelerator.

A company near Cleveland hopes to build a pilot plant where it would grow algae to produce a popular nutrient. The question is, where will it build? Perhaps Michigan?

According to a report from Crain's sister publication Crain's Cleveland Business, AlgiSys LLC of Mayfield Heights has received a $5 million commitment from Michigan investors, said CEO Michael LoPresti, who would not identify them. The state of Michigan also has indicated it will provide a "generous, aggressive loan package" if it moves, LoPresti said, adding that AlgiSys plans to seek incentives in Ohio, too.

AlgiSys, which employs three people full time and five part time, would like to stay in northeast Ohio, LoPresti said. But the company wouldn't fit easily into the sectors targeted by Ohio's economic development program, he said.

The company aims to grow algae to produce both omega-3 fatty acids and high-protein biomass. There is particularly high demand for omega-3s, which studies have shown can reduce the risk of heart disease and stroke and can be used to treat depression, rheumatoid arthritis and high blood pressure.

An official from the Michigan Economic Development Corp. said that AlgiSys has not been approved to receive incentives, but that it's possible the parties are in conversations about them. LoPresti did not respond to a phone message and an email requesting additional information.

A biotechnology startup that’s developed a manufacturing process for producing omega-3 fatty acids from algae has closed $2.5 million of an anticipated $5 million series A round.

Two AlgiSys executives — CEO Michael LoPresti and chief technology officer Charles Roe — confirmed the funding but were hesitant to reveal much more because the round is still open. The Cleveland-area company’s funding was revealed in a regulatory document filed with the U.S. Securities and Exchange Commission.

AlgiSys plans to sell its omega-3 oils to many markets: nutritional supplements, food and beverage,

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animal feed and pharmaceuticals.

Currently, the company is working to perfect its pilot plant and expects to begin commercializing its omega-3s in the first half of 2013, LoPresti said. Roe likened the technique AlgiSys has developed to manufacture omega-3s from algae to the fermentation process used to make products like pharmaceuticals and even beer.

The omega-3 market looks like a good one to be in. A report by research group Packaged Facts valued the global omega-3 market at $13 billion in 2011. More impressively, the market’s growth rate is estimated at between 15 percent and 20 percent annually through 2015.Growth in the European and Asian markets is expected to be particularly high because of a higher concentration of heart disease, according to a report from research firm MarketsAndMarkets.com.

Fish oil accounts for about 85 percent of the global omega-3 market. Flax seed is the major source of omega-3s in the vegetarian market, which is what AlgiSys is targeting.

As for algae omega-3 like what AlgiSys is producing, market dynamics are expected to change in the near future with the entrance of new players, NutraIngredients-USA.com reported. Martek Bioscience is the leader and other players include Aurora Algae and Algae BioScience.

AlgiSys was started in 2009 to commercialize research from Virginia Tech. The company has received funding from suburban Cleveland financial firm Tower Wealth Management, as well as a Small Business Innovation Research (SBIR) grant from the federal government.

Ohio company that grows (yes) algae saysMichigan wants it to cross the borderPublished: January 17, 2012By Chuck SoderCrain News ServiceA Mayfield Heights, Ohio, company aims to use the $5 million it just raised to build a pilot plant wherethe company will grow algae to produce a nutrient that has become a hot commodity.It is unclear, however, whether the company will remain in northeast Ohio.AlgiSys LLC has received a $5 million investment commitment from investors in Michigan, said CEOMichael LoPresti, who would not identify them.The state of Michigan also has indicated it will provide the company with a "generous, aggressive loanpackage" if it moves to Michigan, LoPresti said, adding that AlgiSys plans to seek incentives from countiesand cities in Ohio as well.AlgiSys, which employs three people full time and five part time, would like to stay in northeast Ohio,LoPresti said. However, when the company has inquired about incentives offered by the state of Ohio, itusually is directed toward the Ohio Third Frontier program. And although the economic developmentprogram provides financing for technology companies, AlgiSys wouldn't fit easily into the sectors ittargets, he said.The company has received other types of support from organizations in Ohio. For instance, in 2010 itreceived a $40,000 loan from the Cuyahoga County New Product Development andEntrepreneurship Loan Fund and paid it back a year later, freeing the company from an obligation tomanufacture in the county.AlgiSys also has received grant money from the Center for Innovative Food Technology in Toledoand an investment of a few hundred thousand dollars from two principals at Tower WealthManagement LLC in Beachwood and a handful of their clients.In addition, AlgiSys has received assistance services from the Akron Global Business Accelerator, the Crain’s Detroit Business Page 2University of Akron Research Foundation and BioEnterprise Corp. in Cleveland.The company aims to grow algae to produce both omega-3 fatty acids and high-protein biomass.There is particularly high demand for omega-3s, which are believed to have a variety of health benefits.Studies have shown that they can reduce the risk of heart disease and stroke and can be used to treatdepression, rheumatoid arthritis and high blood pressure.The omega-3 that AlgiSys wants to produce — known as eicosapentaenoic acid, or EPA — commonly isfound in fish oil. That's because fish eat algae, said Charles Roe, who founded the company with LoPrestiin 2009 after the two men left a Florida company that aimed to make fuel from algae.AlgiSys looks to produce EPA as a food additive or a supplement, Roe said. AlgiSys plans to sell the highproteinbiomass as a food additive as well, he said."The food ... play is a more near-term market," said Roe, the company's chief technology officer.An official from the Michigan Economic Development Corp. said AlgiSys has not been approved toreceive incentives from the state but said it's possible the parties are in conversations about them.LoPresti did not respond to a phone message and an email requesting additional information.AlgiSys could end up staying in Northeast Ohio, but the company can't ignore the benefits of moving toMichigan, LoPresti said."We have to go where there is private investment as well as public support," he said.

A Mayfield Heights company aims to use the $5 million it just raised to build a pilot plant where the company will grow algae to produce a nutrient that has become a hot commodity.

It is unclear, however, whether the company will remain in Northeast Ohio.

AlgiSys LLC has received a $5 million investment commitment from investors in Michigan, according to CEO Michael LoPresti, who would not identify them.

The state of Michigan also has indicated it will provide the company with a “generous, aggressive loan package” if it moves to Michigan, Mr. LoPresti said, adding that AlgiSys plans to seek incentives from counties and cities in the state as well.

AlgiSys, which employs three people full time and five part time, would like to stay in Northeast Ohio, Mr. LoPresti said. However, when the company has inquired about incentives offered by the state of Ohio, it usually is directed toward the Ohio Third Frontier program. And though the economic development program provides financing for technology companies, AlgiSys wouldn't fit easily into the sectors it targets, he said.

The company has received other types of support from organizations in Ohio. For instance, it received in 2010 a $40,000 loan from the Cuyahoga County New Product Development and Entrepreneurship Loan Fund and paid it back a year later, freeing the company from an obligation to manufacture in the county.

AlgiSys also has received grant money from the Center for Innovative Food Technology in Toledo and an investment of a few hundred thousand dollars from two principals at Tower Wealth Management LLC in Beachwood and a handful of their clients. In addition, AlgiSys has received assistance services from the Akron Global Business Accelerator, the University of Akron Research Foundation and BioEnterprise Corp. in Cleveland.

The company aims to grow algae to produce both omega-3 fatty acids and high-protein biomass.

There is particularly high demand for omega-3s, which are believed to have a variety of health benefits. Studies have shown that they can reduce the risk of heart disease and stroke and can be used to treat depression, rheumatoid arthritis and high blood pressure.

The omega-3 that AlgiSys wants to produce — known as eicosapentaenoic acid, or EPA — commonly

Crain’s Cleveland Business Page 1

is found in fish oil. That's because fish eat algae, said Charles Roe, who founded the company with Mr. LoPresti in 2009 after the two men left a Florida firm that aimed to make fuel from algae.

AlgiSys looks to produce EPA as a food additive or a supplement, Dr. Roe said. AlgiSys plans to sell the high-protein biomass as a food additive as well, he said.

“The food ... play is a more near-term market,” said Dr. Roe, the company's chief technology officer.

Birth of a revolution

Other companies already produce food additives and other products from algae. Martek Biosciences Corp. of Columbia, Md., which last February was acquired for more than $1 billion by Royal DSM N.V. of Heerlen, Netherlands, produces different omega-3s that are available in food products.

Another company, Solazyme Inc. of South San Francisco, Calif., which harvests algae oils for food and other uses, went public on the Nasdaq stock exchange last May, raising nearly $200 million.

Dr. Roe cited several other companies that, like AlgiSys, are using fermentation instead of photosynthesis to get micro-organisms to produce various chemicals.

“I think we are at the very beginning of a revolution,” Dr. Roe said.

AlgiSys relies on a patented technology licensed from Virginia Tech, but Mr. LoPresti said he would not provide details about it for competitive reasons. The pilot plant to grow the algae would require 10 to 12 acres under its current design, he said.

An official from the Michigan Economic Development Corp. said AlgiSys has not been approved to receive incentives from the state, but added that it's possible the parties are in conversations about them. Mr. LoPresti did not respond to a phone message and an email requesting additional information.

Companies that receive product development loans from Cuyahoga County are required to make the product in the county for at least seven years, but not if they repay the loan, said Greg Krizman, senior director of marketing for Magnet, a manufacturing advocacy and consulting group that administers the program.

Mr. Krizman said he isn't too worried about lots of loan recipients leaving the county. The loans are designed to be repaid over 10 years. He said eight or 10 of the 70 companies that have received loans over the past five years have paid them back ahead of time.

“It's not like a lot of people are paying them back early,” he said.

AlgiSys could end up staying in Northeast Ohio, but the company can't ignore the benefits of moving to Michigan, Mr. LoPresti said.

“We have to go where there is private investment as well as public support,” he said.

CLEVELAND, OHIO, January 1, 2012: AlgiSys is a biotechnology company focused on producing omega-3 fatty acids from algae for the supplement, food & beverage, animal feed, and pharmaceutical industries.

AlgiSys has developed a unique manufacturing process to grow, harvest, and process algae for the production of EPA omega-3 fatty acids and high protein biomass. AlgiSys CEO, Michael LoPresti commented, “Our recent round of initial investment will enable us to focus our attention on the commercialization of our technology and take advantage of the tremendous opportunities in the Omega-3 markets. We are pleased to have found a Series A investment group with the level of sophistication and commitment needed to fund a venture of this nature.” AlgiSys, whose current headquarters is located in Cleveland, Ohio, is currently considering manufacturing in Northeast, Ohio and other surrounding areas.

AlgiSys previously received early stage private investments through the principals of Tower Wealth Management located in Beachwood, Ohio. In 2010, AlgiSys was also awarded a Small Business Innovation Research (SBIR) grant from the United States National Science Foundation (NSF) to fund the initial development and commercialization of its technology. According to Dr. Charles Roe, Chief Technology Officer at AlgiSys, “Seed funding from early stage investors and the NSF grant provided our company with the capital needed to conduct initial laboratory and pilot plant development work on our technology. This additional investment should allow AlgiSys to begin the commercial scale-up and optimization of our unique process to manufacture omega-3 nutritional oils and biomass from algae.”

Michael Finn (VP of Business Development), who assisted in leading negotiations on recent funding, commented, “We are very pleased to have identified investment partners in Northeast, Ohio and Michigan who share our vision of building a world class Omega-3 company. We continue to be very excited about the market opportunities and look forward to meeting the challenges ahead as we enter this multi-billion dollar marketplace.” Mr. Finn has over 30 years of experience in raising venture capital and coaching early stage companies. AlgiSys has received additional coaching and support from Barry Rosenbaum and Gordon Schorr of the Akron ARCHAngels, Dr. Glen Gaughan and Meg Groh of BioEnterprise, and Anthony Margida of the Akron Global Business Accelerator.

Since receiving initial funding, AlgiSys has made significant progress in the commercial scale up of its technology. Mr. LoPresti remarked, “Our funding partners have enable us to accelerate our entry into the market and establish AlgiSys as a player in the vegetarian Omega-3 space. To help ensure our success, we have developed state-of-the-art algal technology, assembled a world-class management team, and established customer relationships in a market that is experiencing double digit annual growth.”

AlgiSys was founded in 2009 by Mr. LoPresti and Dr. Roe to commercialize 12 years worth of algae research.

AlgiSys has developed a unique manufacturing process to grow, harvest, and process algae for the production of omega-3 fatty acids and high protein biomass. Together MBI and AlgiSys have completed the derisking phase proving the viability of the AlgiSys EPA Omega-3 Algal strains. Dr. James Wynn and MBI will lead the strain optimization and process development to allow AlgiSys to launch commercial manufacturing.

“AlgiSys is pleased to partner with MBI, a biotech accelerator with a proven track record of derisking biobased technologies,” said AlgiSys CEO Michael LoPresti. “MBI’s capabilities in derisking biobased technologies are critical to the advancement of our Omega-3 EPA oil project.”

Dr. Wynn is MBI’s Director of Biobased Technology Derisking. Wynn, whose background is in microbial physiology, molecular biology and fermentation development, has 19 years’ experience working on the production of commercially important metabolites by a host of microbial systems (bacterial, fungal, and algal). His work has encompassed production of plant hormones, insecticides, mycotoxins, omega-3 fatty acids, and therapeutic proteins.

“AlgiSys is developing a truly ground-breaking product,” said Wynn. “Using a “non-GMO” fermentation-based approach to produce EPA-rich oil, this technology has enormous potential human health benefits. It is MBI’s mission to help nascent technologies such as this to make the successful transition from promising laboratory finding to a world-changing commercial technology.”

Before joining MBI, Wynn worked for Martek Biosciences, where he was a Principal Scientist and Project Leader responsible for a number of projects including the process development for arachidonic acid (a nutritional oil product included in more than 90% of infant formulas in the USA) and the production of therapeutic proteins by an algal platform. Wynn’s project leadership experience includes managing diverse multidisciplinary projects and collaborations with external academic and industrial partners. Wynn received his Bachelor of Science degree in Applied Biology from the University of Wales, and his Ph.D. in Biological Sciences from the University of Hull.

MBI is both a premier multidisciplinary center sought out by industry partners for unique derisking capabilities—and a mission-inspired 501(c)(3) not-for-profit that collaboratively accelerates the commercialization of biobased technologies. MBI is known for pioneering derisking, a process that quickly and cost-effectively fails flawed technologies while accelerating viable ones through a stage-gated innovation process. Lansing, Michigan-based MBI engages with universities, research institutions and corporations to develop sustainable fuels, chemicals, food and feed. Collaborators have included DuPont, Genomatica and Novozymes. MBI has also worked with Michigan State University and Cargill to develop PLA, the first biodegradable polymer in global use. Technologies developed at MBI are recognized and trusted worldwide. Learn more at www.mbi.org.

Omega-3 fatty acids are among the most in-demand nutritional supplements on the market. Forty years of medical research indicates that among other health benefits, omega-3 fatty acids can lower the risk of certain cancers and improve both cardiovascular health and cogni- tive function. However, these essential substances are not produced naturally by the human body. Omega-3s are supplied only by a diet that typically includes salmon, mackerel, and other types of fish. However, recent attention has also been paid to their availability in certain species of another marine organism: algae.

AlgiSys, LLC owns the exclusive rights to intellectual prop-erty and technology for the production of a particularomega-3 fatty acid from algae using a high-tech fermentationprocess. AlgiSys is focusing on the production of EPA or EicosaPentaenoic Acid, which by itself is a relatively unstable nutritional oil. To be formulated into most foods or beverages, EPA must first be encapsulated by highly engineered nano-sized particles called liposomes, which are often used as a safe delivery system in pesticides, cosmetics, and pharmaceuticals.

To promote the use of omega-3s as food ingredients, the Center for Innovative Food Technol- ogy (CIFT) is sponsoring a project with AlgiSys and Ingredient Innovations International (3i). Wooster is the site of a laboratory already operated by 3i to produce soy-based liposomes for the food and cosmetic industries. AlgiSys and 3i are partnering to develop liposome technol- ogy for the encapsulation of algae oil containing EPA so it can be easily added to food and beverage products. The goal is to create new “functional food” ingredients that can be incorpo- rated into milk, yogurt, ice cream, peanut butter, health bars, juices, and other foods.

“The ability to nano-encapsulate these nutritional oils to enable use in consumer products is a huge advance for the food industry in Ohio,” said Dr. Charles Roe, chief technology officer and co-founder of AlgiSys. “As our population ages and healthcare costs increase, the preven- tive health benefits of dietary omega-3 functional food ingredients becomemore desirable.”

The support offered by CIFT’s Functional Food and Ingredient Development (FFID) program has been instrumental to both AlgiSys and 3i. “CIFT’s FFID program has allowed AlgiSys to collaborate with Ingredient Innovations and apply nano-encapsulation technology to omega-3 ingredients,” Dr. Roe said. “CIFT immediately recognized the potential synergy between our two companies and the value of our technologies to the economy of Ohio.”

Success in the lab will mean the creation of new “functional food” products for Ohio manu- facturers – and new jobs, too. AlgiSys intends to build or acquire a production facility and produce its omega-3 fatty acids for customers in the supplement, food, and beverage indus- tries. As AlgiSys completes its product development work, another successful Ohio company will contribute to the food industry and to the state’s economy.

CLEVELAND, OH: April 4, 2010: Algisys, the Biotech Company focused on delivering omega-3 fatty acids to the supplement, food & beverage, animal feed, and pharmaceutical industries, has been awarded a $150,000 Phase 1 SBIR (Small Business Innovation Research) grant from the National Science Foundation.

CEO Michael LoPresti commented, “We have achieved a significant milestone with this important award. In light of the fact that SBIR grants are highly competitive, the federal government has made a major step to validate the commercial potential of our technology and the value of investing in our company.” According to the federal government, only 15% of those that applied for SBIR grants in 2008 were awarded Phase 1 funding. SBIR grants are a means to selectively develop and commercialize only the most promising domestic technologies. According to CNN Money, “The SBA Office of Technology sees this project of the federal government as a way to fund the early, innovative ideas of some of the most creative thinkers.”

Algisys is engaged in the growing, harvesting, and processing of algae for the production of omega-3 fatty acids and high protein biomass. According to Dr. Charles Roe, Chief Technology Officer at Algisys, “This Phase 1 award will fund a significant portion of the commercial scale-up and optimization of our unique process to manufacture omega-3 fatty acids and biomass from algae.” Dr. Roe, who co-authored the grant with the company’s Chief Science Officer Dr. Zhiyou Wen, was informed that this Phase 1 grant could potentially qualify Algisys for an additional Phase 2 SBIR grant of up to $500,000.

Algisys has an exclusive global license on the IP and technology resulting from research conducted by Dr. Wen over a 12 year period. Dr. Wen’s ongoing research at Virginia Tech is predominately related to the growth and processing of high protein strains of algae containing omega-3 fatty acids. Both globally and in the US, omega-3 fatty acids represent a multibillion dollar market with multiple market segments such as Food & Beverages, Animal Feed, Pet Food, Supplements, and Pharmaceuticals.

Algisys is also working with BioEnterprise, the Cleveland-based business formation and acceleration organization focused on promoting the growth of bioscience companies and supporting the commercialization of biotechnologies. Dr. Glen Gaughan, BioEnterprise’s Director of Business Development, stated that “BioEnterprise is very pleased that the Algisys team has taken another step toward achieving their business objectives. They’ve made steady progress and have impressed us with their diligence and focus. Algisys is a good example of the growing regional strength in bioscience commercialization.” Mr. LoPresti and Dr. Roe, who are the cofounders of Algisys, believe this award also represents an investment in Ohio, which has been hit hard by the economic down turn.

Earlier this year, Algisys was awarded a $25,000 grant from CIFT (The Center for Innovative Food Technology) to develop a novel omega-3 encapsulation process. Algisys has also received part of it’s initial funding through the investment firm of Tower Wealth Management located in Shaker Heights, OH, which is managed by S. Sterling McMillan lll and Ensign Cowell. Algisys CEO, Michael Lopresti remarked, “As we look for additional investors, it is encouraging that NSF thought enough of our unique technology and our ability to commercially produce our products that they awarded Algisys this grant.”